Following on-off merger negotiations over the past few years, Oslo Børs and Norwegian depository VPS are finally recommending that their respective businesses be combined.
Merger negotiations between the Norwegian stock exchange and national securities depository have been ongoing for several years. In January 2004 the two companies terminated merger talks after failing to agree terms. Since then Oslo Børs has increased its shareholding in VPS and now holds a 10% stake in the business.
Under the agreed merger terms, the proposed exchange ratio is 55.56/44.44 for shareholders in Oslo Børs and VPS respectively, equivalent to 0.8 shares in Oslo Bors for each share in VPS.
The proposed exchange ratio represents a 30% premium over the last registered trade in the VPS share and the merger is calculated to be accretive for earnings per share for all shareholders in 2008.
Bente Landsnes will become CEO of the merged operation, while Jan Hellstrøm will be deputy CEO. The two will maintain their responsibilities for Oslo Børs and VPS respectively in the new group.
Leif Teksum, the chairman of the board of VPS Holding, will be proposed as the chairman of the board of the merged company, and Halvor Stenstadvold, chairman of the board of Oslo Børs Holding, will be proposed as the deputy chairman.
The companies says they have so far identified "annual synergy benefits" approaching Nkr50m within 2009, of which a half relates to revenue synergies.
The merger, if it is approved, is expected to come into effect in September this year.